Akums Drugs

Akums Drugs reported a flat revenue growth for FY25 at INR4,170 crores, a 1% decrease from INR4,212 crores in FY24, primarily due to API price erosion and muted industry volumes. Despite these headwinds, the company's PAT for FY25 increased to INR234 crores from INR220 crores in the previous year. Q4 FY25 saw a total income of INR1,073 crores, marking a 12.4% year-on-year increase, with a PAT of INR44 crores.

The core CDMO business experienced flat revenue growth for FY25, with a 2% decline to INR3,208 crores and a 7% decrease in EBITDA to INR454 crores, largely attributed to API price erosion. However, Q4 volumes grew 9% year-on-year, and the company anticipates single-high-digit volume growth for FY26. Management noted that Q4 margins were softer due to product mix and higher COGS, a typical seasonal phenomenon.

Both the API and trade generic businesses continued to be loss-making. The API business recorded FY25 EBITDA losses of INR44 crores, a slight improvement from INR46 crores last year, with a target to reduce losses to ~INR25 crores in FY25 and achieve breakeven by FY27. The trade generic business saw a significant revenue decline of 34.6% to INR115 crores in FY25, with Q4 losses increasing to INR10 crores, prompting management to consolidate and retain only profitable portions.

Akums made strides in global CDMO expansion by signing a EUR200 million contract with a global pharma company, with supplies expected to commence in Q4 FY27. The company received EUR100 million as part consideration in April '25. ANVISA audited its injectable facilities in April '25, with approval anticipated in the next quarter, which is crucial for European market entry. The international branded segment grew 14% in FY25, with a target of at least 20% growth in FY26.

The domestic branded formulation business performed well, with 9% revenue growth and 12% EBITDA growth for FY25, reaching INR434 crores and INR77 crores respectively. The company's IPM ranking improved to 58 in FY25, and it expanded its sales team by 14%. The focus remains on specialty physicians (70% coverage) and chronic portfolios (70%+), particularly in gynaecology and cardio-diabetes, targeting double-digit top-line growth.

Akums has a Capex plan of INR300 crores for FY26, with INR100 crores allocated for maintenance and modernization, and INR200 crores for growth initiatives. These growth investments include setting up lines for oncology, steroids, FFS LVP, and expanding liquid oral capacity for the European market. The company is also actively exploring M&A opportunities within the pharma space to add capabilities, product lines, or market access.

The company maintains a strong liquidity position, reporting a cash surplus of INR566 crores as of Q4 FY25. Including the EUR100 million (INR950 crores) received in April '25, the total war chest and cash surplus stands at INR1,520 crores. Working capital management improved, with net working capital days reducing from 99 to 91 days, providing ample resources for strategic investments and operations.

Akums increased its R&D spend by 16% to INR130 crores in FY25, demonstrating a commitment to innovation and portfolio expansion. This investment supported the launch of 31 DCGI products, including Empagliflozin and its combination, Silodosin, and Mirabegron. The company also expanded capabilities for niche offerings like nasal sprays, eye drops, bilayer tablets, ampules, and FFS small volume parenterals.